10.25.2011
On October 25, MFA filed a comment letter with the SEC in response to coordinated rule proposals from FINRA and other SROs that would amend SRO rules regarding market-wide circuit breakers.  In our letter, we expressed our general support for the proposed changes to implement market-wide trading halts based on declines of 7%, 13% and 20%, respectively, in the S&P 500 Index.  We also expressed support for extending the period during which Level 1 and Level 2 Declines would trigger a trading halt from 2:30 pm to 3:25 pm.  Finally, we encouraged the SROs to amend the proposed trading halts to require a trading halt until the next trading day in the event there is a Level 2 Decline (13%) in the S&P 500 Index after the general cut-off time of 3:25 pm.

10.4.2011
On October 4, MFA submitted a comment letter to FINRA on Rule 5131, New Issue Allocations and Distributions. In the letter, we explain that the structure and operation of hedge funds and funds of hedge funds make it highly unlikely that a hedge fund investor could engage in spinning through an investment in a hedge fund. The letter also explains that many hedge fund managers would comply with the Rule by restricting new issue allocations in a manner that was not intended by the Rule, and recommends that FINRA issue guidance to permit a hedge fund to use a limited look-through approach in applying the de minimis exemption.

10.3.2011

MFA submitted comments to ESMA on its consultation paper on “Guidelines on systems and controls in a highly automated trading environment for trading platforms, investment firms and competent authorities.”   In our response, we supported ESMA’s principles-based approach in the draft guidelines and encouraged ESMA to include confidentiality safeguards and controls to protect trade information of clients that use direct market access and sponsored access as trading tools.  We also strongly disagreed with any regulatory mandate for imposing limits on order entry capacity.  MFA emphasized that ESMA’s regulatory guidelines, specifically those guidelines regarding market manipulation, should more consistently distinguish between technology and individual trading strategies.  More specifically, we stressed that the use of technology should not be confused with high frequency trading or individual trading strategies.

09.30.2011
MFA submitted a comment letter to the CFTC in response to its notices of proposed rulemaking on “Customer Clearing Documentation and Timing of Acceptance for Clearing” and “Clearing Member Risk Management”.  In our letter, MFA strongly supported these proposed rules, as we believe they are essential to achieving the fundamental objectives of the Dodd-Frank Wall Street Reform and Consumer Protection Act: open access to competitive and efficient markets, promotion of greater central clearing of swaps and the reduction of systemic risk through real-time clearing.  From a cost-benefit perspective, we emphasized the benefits of real-time clearing, combined with the elimination of the need for clearing members to build systems to administer execution sub-limits, to foster competitive futures commission merchant (“FCM”) offerings, and to reduce barriers to clearing through FCMs.  We encouraged the CFTC to adopt final rules in the form proposed, with several clarifications that we recommended to ensure that these proposed rules work in tandem with the CFTC’s proposed rules on “Requirements for Processing, Clearing, and Transfer of Customer Positions” to protect open access, fair competition and real-time processing of trades from the moment of execution through communication of clearing disposition.

09.13.2011
MFA submitted comments to ESMA on its consultation on possible implementing measures of the Alternative Investment Fund Managers Directive (AIFMD).  In our response, we encouraged ESMA to: (1) narrow the definition of assets under management to better focus the scope of the AIFMD on those managers and funds that should be of greatest regulatory focus for EU regulators; (2) provide greater flexibility in the methods by which managers calculate leverage; (3) ensure that the rules relating to depositaries do not unintentionally create concentration of risk or overly burdensome costs for fund managers; and (4) avoid imposing requirements on third country managers marketing under national private placement regimes that go beyond the requirements specified in the AIFMD.

09.13.2011
On September 13, MFA submitted a written statement to the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises in connection with the Committee's hearing, "Ensuring Appropriate Regulatory Oversight of Broker-Dealers and Legislative Proposals to Improve Investment Adviser Oversight."  In his written statement, Richard H. Baker, MFA’s President and CEO,  expressed the industry’s support for the framework of Securities and Exchange Commission (SEC) supervision and oversight of private fund managers and non-retail investment advisers as authorized under the Dodd-Frank Act.

See Archives

Report to the Supervisors of the Major OTC Derivatives Dealers on the Proposals of Centralized CDS Clearing Solutions for the Segregation and Portability of Customers CDS Positions and Related Margin Read More

IOSCO Technical Committee's Regulation of Short Selling: Final Report Read More

IOSCO Technical Committee's Hedge Fund Oversight: Final Report Read More

Commission of European Communities Directive of the European Parliament and of the Council on Alternative Investment Fund Managers Read More

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